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Cleco shareholders fail to get injunction

Ninth Judicial District Judge Monique Rauls denied a motion Wednesday from three Cleco Corp. shareholders for an injunction to stop Thursday's meeting in which the sale of the company will be considered.

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Cleco shareholders fail to get injunction

Melissa Gregory
Published 6:07 p.m. CT Feb. 25, 2015

Ninth Judicial District Judge Monique Rauls denied a motion Wednesday from three Cleco Corp. shareholders for an injunction to stop Thursday’s meeting in which the sale of the company will be considered.(Photo11: Courtesy)

Ninth Judicial District Judge Monique Rauls denied a motion Wednesday from three Cleco Corp. shareholders for an injunction to stop Thursday's meeting in which the sale of the company will be considered.

Rauls heard about two hours of arguments from three attorneys before issuing her ruling after a short recess. The attorney for the plaintiff shareholders, David Wissbroecker, said they were "disappointed" with the outcome but said they would regroup to "fight another day" as the Louisiana Public Service Commission takes up the issue in the future.

Two of the plaintiffs were present. Helen Moore of Pineville only said that she was "very, very disappointed," while Lawrence L'Herisson of Baton Rouge had no comment.

According to Wissbroecker, Cleco Chairman, President and Chief Executive Officer Bruce Williamson "bullied and bamboozled" the Pineville company's board of directors into a proposal to sell to an investment group led by Macquarie Infrastructure and Real Assets and British Columbia Investment Management Corporation, together with John Hancock Financial. He alleged that Williamson undertook a campaign with Wall Street brokers to convince board members that Cleco wasn't performing well enough and that a sale was essential.

He characterized the board as "absentee landlords" who did not have all the necessary information to make a decision on the proposed sale and who do not have connections to the Central Louisiana community the company serves.

"The whole process is flawed," said Wissbroecker. "This deal should be stopped dead in its tracks."

If the deal is approved, the public company would become private. Shareholders would get $55.37 per share. The deal also calls for the company to remain headquartered in Pineville, to maintain an aggregate number of employees, salaries and benefits for at least two years and to maintain pension and retiree medical plans at current levels for at least two years.

It also assures that the company will continue its current levels of charitable giving and economic development support.

Wissbroecker asked Rauls to issue the injunction, to "stop this unfair transaction," so that board members could re-examine the sale. He also said that the 150-page proxy that had been sent to stockholders as they considered whether to approve the sale was missing essential information, which meant that they could not make informed decisions.

He pointed to the promises to maintain employees and community involvement, saying those mean nothing and would be broken because Macquarie's only goal is to make money for its investors.

"And that's what's gonna happen here," he said.

But attorneys for Cleco and for the potential buyers shot down Wissbroecker's assertions.

Ed Fuhr, representing Cleco, said lawsuits like this are not unusual. What is "remarkable" about this attempt, he said, was that the plaintiffs were asking a judge to substitute their judgment for that of the board and for the thousands of other shareholders.

And both Fuhr and Jim Gillespie, representing the potential buyers, dismissed the assertion that the board had been "bamboozled" by Williamson. Fuhr presented charts that showed meetings the board held throughout the process.

"They have been actively involved, and it's an insult ... to suggest that they were bamboozled."

Gillespie said his client submitted the only firm offer after months of dealings with as many as 12 other interested parties. He said the three plaintiffs want to stop a deal that — in votes already cast by shareholders — is being favored by a 19-to-1 margin.

Fuhr said the attempt for an injunction was nothing more than a personal attack on Williamson and an attempt to derail the sale.

"He's (Wissbroecker) trying to kill the deal," said Fuhr. "And that's what his client wants."